Following SK Hynix's announcement of a surprise 40 trillion won shareholder return, Samsung Electronics is also expected to unveil a record-breaking shareholder return plan exceeding 100 trillion won, sending a favorable wind through the domestic stock market. Expectations are spreading across the entire market that companies will expand shareholder returns through treasury share cancellations and dividend increases, based on earnings surprises from domestic firms in the second quarter.
According to the financial investment industry and others on the 20th, 38 companies listed on the Korea Exchange have announced treasury share acquisitions since the third quarter, a 31% increase compared to the same period last year. The total amount reached 42.1879 trillion won. This was influenced by SK Hynix's announcement on the 19th of acquiring and canceling 40 trillion won worth of treasury shares.
As second-quarter performance improvements continue and the trend of expanding shareholder returns persists, more companies are implementing shareholder return policies such as treasury share cancellations and dividend increases following share buybacks. Not only banks and financial stocks, long regarded as model students in shareholder returns, but also companies strengthening their shareholder return policies based on improved second-quarter results are increasing.
Semiconductor companies leading the improvement in domestic corporate performance in the first half are a prime example. Yesterday, SK Hynix announced plans to acquire and cancel 40 trillion won worth of treasury shares. This was an announcement to acquire 24.07 million shares based on yesterday's closing price of 1.662 million won. The market reacted immediately. While the expansion of shareholder returns by semiconductor stocks like SK Hynix and Samsung Electronics, whose profits are growing rapidly, was expected, it is significant that it was carried out faster than anticipated and on a larger scale. In particular, SK Hynix revised its existing policy to return 50% of cumulative free cash flow (FCF) from 2025 to 2027 as part of its shareholder return plan, now committing to returning more than 50%, demonstrating its determination for shareholder returns.
Beyond the semiconductor sector, traditional model sectors in shareholder returns such as banks and insurance companies are also announcing shareholder return policies that exceed market expectations based on solid second-quarter results. After second-quarter earnings announcements, financial holding companies all announced shareholder return policies including treasury share acquisitions. KB Financial Group announced a 700 billion won treasury share acquisition last month. Woori Financial Holdings also announced plans to acquire and cancel 150 billion won worth of treasury shares, while Hana Financial and Shinhan Financial Group each announced plans to acquire and cancel 250 billion won and 700 billion won worth of treasury shares, respectively.
It is judged that these shareholder return movements will also lead to stock price movements. Kim Jae-woo, a researcher at Samsung Securities, stated, "We should focus on the fact that bank stocks could see their dividend attractiveness improve by one level from early next year," and predicted, "Such dividend expansions will positively contribute to investor sentiment."
It is also expected that the trend of expanding shareholder returns based on profit growth will continue. This is because large-cap stocks are continuing trends in share buybacks, stock cancellations, and dividend increases as part of shareholder returns. Recently, not only traditional dividend-paying banks and financial stocks but also various industries have continued to move toward acquiring and canceling treasury shares. After second-quarter earnings announcements, Hyundai G&F Holdings planned a 500 billion won treasury share acquisition, and Krafton decided to purchase more than 999 billion won worth of treasury shares. LG Uplus announced a 900 billion won treasury share acquisition.
Future major events such as Samsung Electronics' shareholder return are expected to have a positive impact on the stock market. Samsung Electronics plans to convene its board of directors by August and decide on key shareholder return measures including special cash dividends. The scale of the return is reported to exceed 100 trillion won.
Expectations for year-end dividends are also rising. There is advice that dividend stocks should be considered based on measures such as the separate taxation of dividend income introduced last year. Even during recent market fluctuations, dividend stocks showed relatively stable performance.
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